How to apply and receive funding from Future Fund

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For startups affected by the pandemic, there’s now dedicated financial support from the government in the form of Future Fund.

It’s a £250 million package to support UK-based small firms that are struggling financially as a result of Coronavirus and that aren’t eligible for the Coronavirus Business Interruption Loan Scheme.

With government loans from £125,000 to £5 million now available Anthony Rose, CEO and founder of SeedLegals explains that it’s definitely worth applying if you run a startup that is facing financial challenges. But how do you do that exactly?

Do you qualify?

The first thing to do is check if your company qualifies for the scheme. You should have raised £250,000 or more and be able to raise at least £125,000 of investment yourself. Future Fund will match this, doubling the amount.

However, there’s one caveat. Future Fund isn’t SEIS/EIS compatible at this moment in time (SeedLegals is lobbying the government to change that), which means you’ll have to get the backing of a VC investor or an angel investor who is able to give up SEIS/EIS when they invest in your company. Make sure your company will qualify for and can actually benefit from Future Fund before stopping or changing any fundraising plans you already have in place.


So, now is the crucial stage. How do you apply and get money from Future Fund? There’s been much talk about what the fund can do for businesses, but pretty much nothing on how it actually works.

  1. Check that you qualify.

  2. Find investors.

  3. You’ll need investor consent, a shareholder resolution and a board resolution so that existing investors and shareholders agree that your company can receive funds from Future Fund.

  4. You’ll need to download the Future Fund Convertible Note, which is available from the website. This will be available sometime in May.

  5. Go through the required details (including those of all investors and their investments) and fill them in.

  6. You’ll need to run Do KYC (Know Your Investor) and AML (Anti Money Laundering) checks on all your investors.

  7. They’ll need to sign the Convertible Note. Once that’s done, email this along with shareholder approvals to Future Fund.

  8. An inspector working for the fund will then go through your application and work out if your company qualifies. They may look at your Companies House filings to see if you’ve raised more than £250,000 previously, before ensuring investors are legitimate and they’ve signed the required papers.

  9. If your company is approved, you’ll receive an email from Future Fund saying you can proceed and a government-signed agreement (either in this email or sent via the post).

  10. Your investors will then be able to send funds directly to your company bank account. When they do that, you’ll need to provide the government with bank statements or other proof to show that you’ve received funds from all your investors.

  11. Finally, once the government has seen proof, it’ll send its funds.

Find investors

Now that you know how this process works, you can start looking for investors. As it stands, Future Fund starts at £250 million. While that sounds a lot, it’s actually not, it’d only fund 500 companies if their average investment raise was £500,000.

Rumour has it that the government intends to increase this amount depending on demand, but that’s not a given. So you want to make sure you’re right at the start of the queue when the scheme opens, which is why you should begin looking for investors right away as opposed to waiting.

Should you be primarily raising from existing investors, start these conversations now. Go through the fund terms, the match investment and see if they can top up their previous investment.

If you intend to primarily raise from new funds and VCs, due diligence can take months. So prepare yourself by sorting all the necessary paperwork now. SeedLegals actually offers a free Due Diligence Checklist (Quick Agreements -> Investor Agreements).

If you are primarily raising from angel investors, things will be harder. You’ll need to convince them to forego SEIS or EIS when making their investment. Sadly, as it stands, Future Fund isn’t compatible with SEIS/EIS.

Conduct investor KYC / AML checks

When it comes to receiving money from investors, completing Know Your Customer and Anti-Money Laundering checks is very important. It’s pretty simple – you just need a photocopy of their passport and keep that on file. The government expects everyone to do this to make sure it’s investing in legitimate businesses. SeedLegals is working to simplify this process.

Ensure Companies House filings are up to date

It’s extremely likely that the government will verify that your business has raised at least £250,000 previously. We’re not sure how they’ll do that exactly, but one of the easiest ways is by reviewing Companies House filings. All they need to do is multiply the shares on every SH01 filed for each share by the stated price by share to see how much has been raised. Now is the time to check that these filings are up-to-date.

Arrange investor consents

To be able to issue more shares in the future, shareholders and your board must agree by giving their consent. Should you have Investor Consent provisions in your last funding round (which is the case for most companies applying for government funding), you’ll need consent from 50% of the investors by the number of shares held. This isn’t exactly hard, but it can take weeks to get all the required paperwork signed. So now is when you should be arranging investor consents.

As the pandemic is affecting businesses right across the country, it’s likely that the Future Fund scheme will face high demand. Don’t wait until it goes live to start taking all these steps; you should start preparing right now. Otherwise, you won’t be at the front of the queue and may miss out on crucial funding.

When it comes to conducting the different checks and getting approvals, you can do all of these things on the SeedLegals platform. Sign up here.